Thrifty Car Rental 2011 Annual Report Download - page 60

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2011, 2010 AND 2009
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Dollar Thrifty Automotive Group, Inc. (“DTG”) is the successor to Pentastar Transportation
Group, Inc. Prior to December 23, 1997, DTG was a wholly owned subsidiary of Chrysler LLC
(such entity or its successor entity, Chrysler Group LLC, as the context may require, and the
relevant entity’s subsidiaries and members of its affiliated group are hereinafter referred to as
“Chrysler”). On December 23, 1997, DTG completed an initial public offering of all its
outstanding common stock owned by Chrysler together with additional shares issued by DTG.
The Company operates under a corporate structure that combines the management of
operations and administrative functions for both the Dollar and Thrifty brands. Management
makes business and operating decisions on an overall company basis. Financial results are
not available by brand.
DTG’s significant wholly owned subsidiaries include DTG Operations, Inc., Dollar Rent A Car,
Inc., Thrifty, Inc. and Rental Car Finance Corp. (“RCFC”). Thrifty, Inc. is the parent company of
Thrifty Car Sales, Inc. and Thrifty Rent-A-Car System, Inc., which is the parent company of
Dollar Thrifty Automotive Group Canada Inc. (“DTG Canada”). RCFC is a special purpose
financing entity, which was formed in 1995 and is appropriately consolidated with DTG and
subsidiaries. RCFC is a separate legal entity whose assets are not available to satisfy any
claims of creditors of DTG or any of its other subsidiaries. The term the “Company” is used to
refer to DTG, individually or collectively with its consolidated subsidiaries, as the context may
require. Dollar Rent A Car, Inc., the Dollar brand and DTG Operations, Inc. operating under the
Dollar brand are individually and collectively referred to hereinafter as “Dollar”. Thrifty, Inc.,
Thrifty Rent-A-Car System, Inc., Thrifty Car Sales, Inc., the Thrifty brand and DTG Operations,
Inc. operating under the Thrifty brand are individually and collectively referred to hereinafter as
“Thrifty”. Intercompany accounts and transactions have been eliminated in consolidation.
Nature of Business – The Company operates in the U.S. and Canada, and through its Dollar
and Thrifty brands is primarily engaged in the business of the daily rental of vehicles to
business and leisure customers through company-owned stores. The Company also sells
vehicle rental franchises worldwide and provides sales and marketing, reservations, data
processing systems, insurance and other services to franchisees. RCFC provides vehicle
financing to the Company.
Estimates – The preparation of the Company’s consolidated financial statements in conformity
with accounting principles generally accepted in the United States of America (“GAAP”)
requires management to make estimates and assumptions that affect the reported amounts
and disclosures in the consolidated financial statements. Actual results could differ materially
from those estimates.
Cash and Cash Equivalents – Cash and cash equivalents include cash on hand and on
deposit, including highly liquid investments with initial maturities of three months or less.
Cash and Cash Equivalents – Required Minimum Balance – In 2009, the Company
amended its Senior Secured Credit Facilities (hereinafter defined). Under the terms of that
amendment, the Company was required to maintain a minimum of $100 million at all times. In
February 2011, the Company further amended its Senior Secured Credit Facilities, eliminating
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